Topic of discussion:- Innovation is the key to sustain in the market.

Impact of Globalistion on Channapatna toy

Important statistical data.

Working Environment in toy industry

Facts • Traditional toy sector is a Labour Intensive Industry  • Predominantly based in Small and Tiny Sector  • Use of Multiple Technologies & machineries for production

Technology and varied Raw Materials  • Estimated Industry turnover is approximately Rs. 1500 crores in the

organised Sector and about Rs.2500 crores in the unorganised sector  • Annual growth rate is around 15 to 20%.   What the Toy Industry means to India • Employment to over two million people (70% women workforce) • Workers mostly from economically and socially weaker sections  

Toy Market Country Market

Country

Size Share in Spending Kid to 15

(US $ World Toy per Kid $ Population

years old

(%)

Million) Market (%)

United States 21,680.83 27.7 281 61.6 20

Japan 5,823.62 7.5 286 17.4 15

China 4,527.07 5.8 17 267.4 1

United 4,127.57 5.3 348 10.3 13

France 3,585.74 5.1 293 11.9 13

Germany 3,189.37 4.1 223 11.4 21

Brazil 2,091.94 2.7 38 52.9 3

India 1,939.50 2.5 5 361.4 0

Mexico 1,794.85 2.3 53 32.6 4

Italy 1,703.22 2.2 185 7.9 14

World Toy Market -Top 10 Countries in the World

Innovation-Key to sustainChina is the biggest toy producing country in the

world. China accounted for more than 33% of global

exports of toys, games and sports requisites in value terms during 2006 as compared to India’s global share of a meager 0.185%.

Innovation is perceived as very important by almost all the responding units. The design aspect of toy manufacturing was considered as one of most important activity by 98% (high 92% + very high 6%) of the responding toy manufacturers

Overview of Toy Manufacturing:

Indicators 1995-96 2000-01 2005-06

Number of Factories 843 748 839

Number of Workers 28008 33899 48321

Gross Value Added27614 42737 48734

(Constant Prices 1993-94=100)

Value of Output122460 179098 233495

(Constant Prices 1993-94=100)

Capital stock56940 281045 377660

(Constant Prices 1993-94=100)

Trade in Wheeled Toys designed for children (e.g. Tricycles, Scooter, Pedal Cars, Dolls Carriages) between India and World Market

YearExport

(Rs. Lakhs)Import

(Rs. Lakhs)Trade Ratio

(Export/Import)

1996-1997 4.13 25.31 0.16

1997-1998 12.7 88.4 0.14

1998-1999 13.67 173.84 0.07

1999-2000 11.12 205.12 0.05

2000-2001 32.88 242.98 0.13

2001-2002 11.55 180.34 0.06

2002-2003 114.66 201.06 0.57

2003-2004 114.51 318.97 0.35

2004-2005 251.91 427.69 0.58

2005-2006 98.02 613.07 0.15

2006-2007 115.91 1,016.44 0.11

2007-2008 98.37 175.23 0.56

Sources of China’s Price Competitiveness 

– Low wages  

– Counterfeiting and piracy  

– Minimal worker health & safety regulations  

– Lax environmental regulations & enforcement  

– Export industry subsidies  

– A highly efficient “industrial network clustering” and large scale operation 

– The catalytic role of Foreign Direct Investment (FDI)  

– Superior infrastructure - both general and specific to toy sector  

– Proximity to Hong Kong   

– An undervalued currency  

Toy Clusters of Guangdong Province, China

Different Sources of Price Advantage for China in the Toys Sector

S.No. Sources of Price Advantage Percent1 Wages 39.41

2 Subsidies 16.71

3 Network Clustering 16.02

4 Undervalued Currency 11.44

5 Counterfeiting & Piracy 8.63

6 FDI 3.09

7 Health & Safety 2.44

8 Environmental 2.26

TOTAL 100.00

COST ANALYSIS:SL NO PARTICULARS Rs.

1 Cost of wood:- Government rate (classified by forest dept, under timber

tree) Private suppliers

1200/ton

900/ton

2 Cost of lac Highest quality lac ( Button Lac ) Medium Brown Color Poor quality lac ( dark black)

120/kg

80/kg

60/kg

3 Screw spine / tale gari leaves. 20/100 leaves

4 Monthly salary of skilled labour 5000-6650/month

5 Daily wage worker 200-400/day

6 Price range of toys 30-1500/-

State wise Distribution of Toy Manufacturing Units

(1) Category of Toy Manufacturing Units AND (2) Percentage of Units having Quality Accreditation

(1) (2)

EX-IM STATUS: Only 6.3% of the responding units are exporters of toys. The reasons for not exporting has been cited by respondents being no knowledge of export procedures (75%) and no help from authorities/association (25%).

(1)Growth of Domestic demand in recent years (2)Competition in the domestic market from Imported

products(1) (2)

WORKING ENVIRONMENT The operating workplace of the workers is

usually dusty. No one uses precautions like masks. The

surrounding in working rooms is very humid. The factories are usually sheet/shed factories.

Use of bare hands while working can be pretty hazardous to them.

The workers stop working when there is no profit and they show no much interest in teaching their art to the next generation if there is good export, it can be a good motivating factor for them to work harder.